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Gas cost hinders business

Contracts limit options, fuel angst

High gas prices that have soared to all-time highs in April with no end in sight have county businesses and the farming community feeling the pinch.

Butler County consumers are now paying an average of $1.72 per gallon for regular gasoline and $1.77 for diesel fuel, according to the American Automobile Association.

AAA said the record high prices for regular gasoline are due to a number of factors, including:

Rising fuel consumption

High crude oil prices

Insufficient domestic refining capacity

Complicated federal and state clean fuel regulations

Chronically low inventories.

World crude prices are at their highest levels since 1990, according to a news release from the U.S. Environmental Protection Agency.

U.S. light sweet, crude reached a 13-year peak of $38.35 per barrel in late March, according to the EPA.

The U.S. traveling public also continues to grow. During the past 20 years, the vehicle miles traveled have increased 114 percent, while the population has grown only 27 percent, according to the EPA.

Though many trucking companies have chosen to pass on increased fuel costs to their customers, trucking firms like Robert M. Neff in Cranberry Township, which has a contract with the U.S. Postal Service, have to absorb the added expense because their contracts do not have provisions to cover added fuel costs.

"It's our number one cost," said Rob Jackson, the company's terminal manager, speaking of gasoline. "When it goes up, it's always a priority."

Jackson said he is confident the prices will go down in the near future.

The company is trying to conserve fuel by telling its drivers not to sit and idle their trucks for long periods of time.

Other companies that do a lot of traveling, such as the Cranberry Township Volunteer Ambulance Corps and the Butler Ambulance Service, also continue to provide the same levels of service without transferring high fuel prices to customers.

Lynn Bourchier, supervisor at the Cranberry Township Volunteer Ambulance Corps, said the group has seen the crush from the gas prices, but because insurance and Medicare have set reimbursement levels for traveling costs, the costs are being absorbed by the service.

"Higher fuel prices definitely have an impact on us because there is no reimbursement for higher fuel prices," said Gene Troyan, director of operations for Butler Ambulance Service.

Fuel prices have gone up in the past and the service was able to weather the increases, Troyan said. "We just have to hope the prices will be adjusted," he said.

County farmers are feeling a heavy effect from the high gas prices, with no recourse to recoup costs.

Luke Fritz, director of the Butler County Farm Service, said the high fuel prices affect all parts of farming, including the engines that power the irrigation water pumps and increases in nitrogen fertilizer costs.

"Right now, we're eating (the gas price hike)," said Jim Marburger of Marburger Farm Dairy in Evans City. "We can't put a surcharge onto our haulers and the milk board sets the cost of milk."

If high gas prices persist later into the year, Marburger said, the only recourse for dairy farmers would be to ask the milk board for an increase in milk prices.

Farmer Howard Halstead of Saxonburg said because the prices have gone up nearly 70 cents per gallon over last year, the costs have forced him to use his larger diesel-fueled tractors to do smaller jobs that would have been done with gasoline-powered tractors.

Although diesel fuel is more expensive than gasoline, diesel equipment can operate longer on the same amount of fuel.

Halstead grows corn, beans, oats, wheat and hay on his 200 acres.

Halstead added he would likely attempt to do some no-till planting as a way to save some operational costs, but that technique depends on the weather and how damp the soil is this season.

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